Businesses and individuals engaged in any business activity whose turnover exceeds the mandatory VAT registration threshold specified by the respective national VAT laws must register for VAT. Voluntary VAT registration will be optional where the business turnover is below the mandatory VAT registration threshold – careful consideration should be given to the potential amount of VAT reclaimed on purchases by the business as well as the compliance costs in administering and reporting the tax, before making such a decision. Businesses not registered for VAT cannot charge VAT on their sales and cannot claim any VAT incurred on their inputs.
The UAE is on the way to implement VAT from January 2018. Now the businesses are getting ready to register for VAT. From 1st January 2018 5% VAT will be applied for both goods and services. VAT is a tax charged from consumers or customers.
Though there are some exemptions, VAT will be implemented on most of the dealings. The organizations or businesses having the annual turnover more than the specified limit have to register for the VAT. The businesses / organizations exceed the threshold of AED 375,000 will have to register for VAT and voluntary at least AED 187,500.
The businesses can register for VAT in any region of the country using the online services. The VAT registration is enabled to an individual, a company or any other commercial authority. The process is similar for all the different entities. The documents required for VAT registration differs from individuals to corporates. The basic document required for VAT registration includes the proof of business and a request letter signed by the individual or a company authority.
Here completes your VAT registration.
After registering for VAT the authorities will be monitoring business records & transactions. OBM provides assistance and guidance in VAT related financial management and book keeping.
The process of charging VAT on supplies of goods and services requires businesses to issue VAT invoices. A VAT Invoice is a document that must be produced and issued by VAT registered businesses to provide documentary evidence of the sale of goods and services in compliance with the VAT law. A VAT Invoice is also required by the business as documentary evidence to support VAT credit claims, i.e. VAT incurred on the acquisition of goods and services for the purposes of the business can only be claimed if the business holds a valid VAT Invoice from the vendor.